REGULATION TO EMPLOY EXPATRIATES FOR REPRESENTATIVE OFFICE IN INDONESIA

“Article 22 (3) of BKPM Regulation No. 15 of 2015 also stated, Representative Office that appointing Chief of Representative who is a foreigner and/or employ expatriates, shall hire Indonesian workers in accordance with the Laws of the Republic of Indonesia.”

When a foreigner or foreign company wants to expand their business and network, explore business opportunities or provide other managerial support in Indonesia to the parent company abroad, they may to choose to establish a Representative Office of Foreign Company. Here in Indonesia we called it as Kantor Perwakilan Perusahaan Asing, or KPPA). According to the Article 1 No. 28 of BKPM Regulation No. 15 of 2015 on Guideline and Procedure of Investment Licensing and Non-Licensing,

“Representative Office of Foreign Company, hereinafter referred to as KPPA, is an office headed by one or more foreign citizens or Indonesian citizens appointed by foreign companies or foreign joint-ventures overseas as their representatives in Indonesia.”

There are some activities that representative office can do, such as:

Act as supervisor, liaises between the foreign parent company and its branches in Indonesia, coordinator, and manage all of company and its branches’ interests.

Market research for material and product based on company requirements.

Supervised company sales in Indonesia for marketing activity.

Based on the Article 22 (1) of BKPM Regulation No. 15 of 2015, the activities of a representative office are limited to:

Taking care of the interests of the foreign parent company or its affiliated companies

Preparing the establishment and development of a foreign investment company in Indonesia

Representative office must be located in the capital city and inside of an office building. (You cannot open the representative office in a house or apartment).

It needs to be emphasized that KPPA is strictly forbidden from engaging in commercial activities and generate revenue/profit. If foreign investors want to open a foreign investment company, they often started by open a representative office in Indonesia first in order to “get to know the market” and if their findings are positive, then they will open a foreign investment company.

According to the Article 30 (1) of BKPM Regulation No. 15 of 2015, a foreign investment company and representative office are allowed to employ foreign workers. In order to employ foreign workers or expatriates, the foreign investment company and representative office must have the expatriate working permits, which is:

Expatriate Manpower Utilization Plan or RPTKA

Work Permit or IMTA

Article 22 (3) of BKPM Regulation No. 15 of 2015 also stated, Representative Office that appointing Chief of Representative who is a foreigner and/or employ expatriates, shall hire Indonesian workers in accordance with the Laws of the Republic of Indonesia.

Decree of Ministry of Manpower and Transmigration No. 464 Year 2012 stated that the positions are eligible for Representative Office are limited only for Chief of Representative and Assistant to Chief Representative.

All of the representative office that wants to employ foreign workers have to make sure that they are ready to come to Indonesia by having Work Visa issued by Representative Office of the Republic of Indonesia abroad. Requests for permit for foreign workers shall be submitted online to the central PTSP in BKPM, Provincial BPMPTSP, Regency / Municipal BPMPTSP, PTSP KPBPB or PTSP KEK in accordance with their authority.

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ELSON and SMARTLEGAL.ID announce future branding of their combined operations

We have grown our operation under ELSON over many years through our services, unique culture, as well as incredible customer community. We are dedicated to continuously improve the quality our support to our clients and continued commitment to provide the best experience in legal aspects with simple ways, attractive, and easy to understand.

As part of our journey to extend easy access to legal solution for our clients, we are pleased to announce that ELSON is now officially integrated under one brand, smartlegal.id. Going forward, our new logos will replace our old logos and you will see the new look anywhere we’re out in public, our corporate documents, email, stationery, website, and social media, very soon.

Our new logo will be in dynamic colored design as below:

This integration will bring us to the right position to grow our business specialty which is dedicated in producing excellent services to the clients, an emphasis on honesty and integrity and the importance of bringing a value-added services to our customers, both locally and globally, as well as to our business partners across Indonesia and overseas.

Following the integration we will now operate as smartlegal.id. Moving forward will launch a new website smartlegal.id and our business email will further use smartlegal.id domain (we will provide further notification regarding the email address details accordingly).

For your convenience this website will remain active and will be operated under smartlegal.id, you will still able to access and order our services through this website or via smartlegal.id.